Market Volatility Has You Worried? Here’s Something You Can Control

When investors are faced with turbulent markets, there’s a human response to want to do something—sometimes, anything. We’re hardwired to try to take control. That doesn’t always help us make the best investment decisions. However, as reported in this Daily Camera’s article, there is something that you can do that may make you feel better: “Freaked out about the market? Resolve to get your estate in order.”

If you care about your health care, financial affairs, minor children and even your beloved pets, this is an important task to take care of. An estate plan includes legal documents that help you, when you are living and helps your heirs, when you die. In addition to a will, powers of attorney that will give your loved ones the ability to manage your affairs, if you become incapacitated. An updated will ensures that your assets go to the inheritors you chose. Don’t forget your beneficiaries.

Your beneficiaries are the people who are named on several accounts and life insurance policies. You may have named people on investment accounts, life insurance policies, IRAs, bank accounts, annuities and other assets. If you have not done a full review of those documents in a while, you want to take care of this right away. Life and relationships change over time, and the people you originally named as your beneficiaries, may no longer be the ones you would select today. Note that any changes must be made while you are living—when you are passed, the beneficiaries receive the asset, regardless of what is written in your will.

If you’re not sufficiently motivated to make an appointment with an estate planning attorney, you should be aware that if you don’t have a will, the laws of your state will determine who gets your assets and even, lacking a will that names a guardian, who rears your minor children. You may or may not be a fan of court proceedings, but if you don’t have a properly prepared will, the court is going to be making a lot of decisions on your behalf.

Contact an estate planning attorney to begin the process of putting your affairs in order. An attorney whose practice focuses in this area of the law, is most likely a better choice than one who does wills on the side. There are many complex laws in estate planning, and there are many opportunities available to make the most out of your assets and grow your legacy. An estate planning attorney will know what will work best for you and your family.

Reference: Daily Camera (Jan. 6, 2019) “Freaked out about the market? Resolve to get your estate in order”

Suggested Key Terms: Estate Plan, Will, Power of Attorney, Minor Children, Guardian, Beneficiaries

Legacy Planning for Farm and Ranch Families

An inheritance is more than money or property, especially when it comes to family farms, ranches and businesses. Many survive for multiple generations, says the Woodward News in the article “Plenty to consider in legacy planning,” but it takes planning.

Knowing that one day your grandchildren, and hopefully their children, will walk the land their great-grandparents did, and take the same satisfaction in knowing that the work they do, is a part of our country’s economy. Every family’s situation is different but one thing they all share in common, is that succession goals need to be evaluated critically, even though there is great emotion involved in passing on a legacy.

Dividing assets, sharing control and management decisions and transferring ownership are all things that must be examined and formalized as part of a succession plan.

For starters, determine the overall goal. Every family’s goals are different. Should assets be held for end-of-life-care for aging parents, passed on to children, donated to charity or are they needed to ensure the successful transition of the business to the next generation?

People work hard their whole lives to accumulate assets, so it’s important to have a legacy plan.  In this way, everything you’ve worked for is preserved for the next generation or available for your needs as you age.

In 2019, gift and estate tax exemptions are up dramatically, but strategic planning still needs to be done.

For farm families, the Farm Journal Legacy Project offers printable downloads, including a succession planning action guide, family meeting agenda, conversation starters and a goals clarification worksheet.

Family meetings will need to tackle some topics that may benefit from the presence of an estate planning attorney, who is experienced with family farms and succession planning.

  • How will the transfer of property, including farm equipment, property, and livestock, be done with minimal taxes due?
  • How can the non-farming members of the family receive their fair share of their inheritance, without taking away valuable resources needed to keep the farm or ranch going?
  • What resources will be available for the older parents to live on, when they retire?
  • Can the farm support multiple generations?

Succession planning that works best, begins long before the farm family is thinking about retirement. Determining roles and responsibilities and setting accountability for those roles must start happening long before the oldest generation steps away from the day-to-day operations of the farm or ranch.

Reference: Woodward News (Jan. 2, 2019) “Plenty to consider in legacy planning”


Do I Need a Business Budget?

Estimating and matching expenses to revenue (real or anticipated) is vital. This exercise helps small business owners to determine whether they have enough money to fund operations, expand the business and generate income. Investopedia says in its article “6 steps to a better business budget” that without a budget or a plan, a business runs the risk of spending more money than it’s taking in, or not spending enough money to grow the business and compete successfully.

Every business owner will have a somewhat different process, situation or way of budgeting. However, every business owner should consider the mortgage, utility bills, payroll expenses, cost of goods sold, expenses (raw materials), interest, tax payments and any other costs specifically associated with the business, when setting up or taking over an existing business.

A business that’s already up and running can make assumptions of future revenue based on recent trends in the business. If it’s a startup, you’ll have to make assumptions based on your geographic area, hours of operation and research of other local businesses.

After you have this information, you should then match the business’s revenue with expenses. Calculate what an average weekly expense would be for overhead, utilities, labor, raw materials, etc. Based on this information, you may then be able to estimate whether you’ll have enough extra money to expand the business, or to save. Similarly, owners may see that to have three employees instead of two, they’ll have to generate more in revenue each week.

Use these six tips to help you put together a small business budget:

  1. Industry Standards. Conduct some research for data about the industry, speak with local business owners, visit the local library, and look at the IRS web site to get an idea of what percentage of the revenue coming in will likely be allocated toward cost groupings. Small businesses can be extremely volatile, since they are more susceptible to industry downturns than larger, more diversified competitors.
  2. Create a Spreadsheet. Prior to buying or opening a business, make a spreadsheet to estimate what total dollar amount and percentage of your revenue will need to be allocated toward raw materials and other costs. Talk with any suppliers you’d have to work with before you continue. Do the same thing for rent, taxes, insurance, etc.
  3. Add in Some Breathing Room. While you may estimate that the business will generate a certain rate of revenue growth going forward or that certain expenses will be fixed or can be controlled, these are never set in stone. Factor in some slack and make certain that you have more than enough money saved or coming in, prior to expansion or adding new employees.
  4. Cost-cutting. Review items that can largely be controlled. You should also wait to make purchases until the start of a new billing cycle, or take full advantage of payment terms offered by suppliers and creditors. A little maneuvering could give a business owner some much needed breathing and expansion room.
  5. Review the Business. Although many firms draft an annual budget, small business owners should do so this more often. It’s not uncommon for small business owners to plan only a month or two ahead, because business can be quite volatile and unexpected expenses can ruin revenue assumptions.
  6. Keep an Eye Out for Less Expensive Services and Suppliers. Don’t be afraid to shop around for new suppliers or to save money on other services being used by your business.

Budgeting is easy, but it’s an essential process that business owners use to forecast (and then match) current and future revenue to expenses. Make certain that enough money is available to keep the business operating, to grow the business, to compete and to ensure a solid emergency fund.

Reference: Investopedia (June 26, 2018) “6 steps to a better business budget”


Emergency Planning for Seniors: Simple to Do, Critical in a Crisis

What if a crisis should strike an elderly person living alone, or a senior couple who lives in their own home? No one likes to think that it will happen, but inevitably it does, says WRAL in a useful article titled “Having an emergency plan critical for safety and health of seniors.” It’s good to stay calm—and it’s even better to stay calm and quickly access the information and resources that could make the difference between life and death.

Sounds dramatic, but it’s true.

Why should you know how you’ll react in a crisis? The best way, say aging experts, is to think about the situation and the different parts in advance. Knowledge is power, and nowhere is this truer than in emergency situations.

Start by discussing health concerns with your doctor. When should you call the office, and when should you call 911? What is a normal ache or pain, and what kind of pain or sudden change signals an emergency?

If you are not sure what you or a loved one is feeling, call 911. There’s no need to hesitate because you’re not sure about whether it’s an emergency. Dispatchers are trained to identify emergencies and they can assess the situation quickly, even if you can’t.

One thing we should all have, regardless of our age, is a printed-out list of medications, diagnoses, names and phone numbers of medical providers and family contact information. This should be kept in a place where emergency responders and family members will have access to it quickly. EMS workers may not have time to review your medicine chest or a stack of bottles on the night table, but they will need to know what medications you are taking. A list—and one that you keep current—could save your life.

As a crisis unfolds, another list becomes important: documents from your estate plan. That includes your general power of attorney, health care power of attorney, and DNR (Do Not Resuscitate, if that is appropriate in your situation). The health care power of attorney will cover any health care decisions that arise, and the general power of attorney will cover financial, business and personal decisions.

Copies of these designations should be kept easily at hand at home. Make sure to tell the people you have appointed that you have done so, and what the expectations are for them.

Plans for what happens after the emergency has passed the crisis stage should be discussed, also preferably in advance. If the emergency was a fall or the senior is no longer capable of living independently, there may need to be changes made to the senior’s living situation. Rather than being forced to make a fast decision about a new living situation after an emergency, devote time to touring independent or assisted living communities to make a transition to a new home easier, than doing so in haste.

Identifying possible future living arrangements in advance also provides the opportunity to make the necessary financial arrangements. The hope is to prevent the senior from feeling like they’ve abruptly gone from the comfort and familiarity of their own home to a new and unwelcoming environment with no advance notice.

Preparing for a crisis in the short and long term may require some difficult conversations, but with the right care and planning, it may make life easier and more pleasant for the senior and the family.

Reference: WRAL (Jan. 2, 2019) “Having an emergency plan critical for safety and health of seniors”


Thinking about Giving It All Away? Here’s What You Need to Know

There are some individuals who just aren’t interested in handing down their assets to the next generation when they die. Perhaps their children are so successful, they don’t need an inheritance. Or, according to the article “Giving your money away when you die: 10 questions to ask” from MarketWatch, they may be more interested in the kind of impact they can have on the lives of others.

If you haven’t thought about charitable giving or estate planning, these 10 questions should prompt some thought and discussion with family members:

Should you give money away now? Don’t give away money or assets you’ll need to pay your living expenses, unless you have what you need for retirement and any bumps that may come up along the way. There are no limits to the gifts you can make to a charity.

Do you have the right beneficiaries listed on retirement accounts and life insurance policies? If you want these assets to go to the right person or place, make sure the beneficiary names are correct. Note that there are rules, usually from the financial institution, about who can be a beneficiary—some require it be a person and do not permit the beneficiary to be an organization.

Who do you want making end-of-life decisions, and how much intervention do you want to prolong your life? A health care power of attorney and living will are used to express these wishes. Without these documents, your family may not know what you want. Healthcare providers won’t know and will have to make decisions based on law, and not your wishes.

Do you have a will? Many Americans do not, and it creates stress, adds costs and creates real problems for their family members. Make an appointment with an estate planning attorney to put your wishes into a will.

Are you worried about federal estate taxes? Unless you are in the 1%, your chances of having to pay federal taxes are slim to none. However, if your will was created to address federal estate taxes from back in the days when it was a problem, you may have a strategy that no longer works. This is another reason to meet with your estate planning attorney.

Does your state have estate or inheritance taxes? This is more likely to be where your heirs need to come up with the money to pay taxes on your estate. A local estate planning attorney will be able to help you make a plan, so that your heirs will have the resources to pay these costs.

Should you keep your Roth IRA for an heir? Leaving a Roth IRA for an heir, could be a generous bequest. You may also want to encourage your heirs to start and fund Roth IRAs of their own, if they have earned income. Even small sums, over time, can grow to significant wealth.

Are you giving money to reputable charities? Make sure the organizations you are supporting, while you are alive or through your will, are using resources correctly. Good online sources include or

Could you save more on taxes? Donating appreciated assets might help lower your taxes. Donating part or all your annual Required Minimum Distributions (RMDs) can do the same, as long as you are over 70½ years old.

Does your family know what your wishes are? To avoid any turmoil when you pass, talk with family members about what you want to happen when you are gone. Make sure they know where your estate planning documents are and what you want in the way of end-of-life care. Having a conversation about your legacy and what your hopes and dreams are for family members, can be eye-opening for the younger members of the family and give you some deep satisfaction.

Reference: MarketWatch (Oct. 30, 2018) “Giving your money away when you die: 10 questions to ask”


Stay in Control: Good LLC Governance

The LLC is a popular way to structure a business because it provides personal liability protection to the members– like a corporation does to its shareholders–but without as many administrative formalities. But if you’re an LLC member, don’t let this lull you into complacency.

As a business owner, you’re responsible for the proper governance of the LLC.  If a conflict arises—either among LLC members or between the LLC and a third party—the governing documents and methods through which the owners govern the LLC may help prevent a conflict from escalating into litigation. Even if a dispute reaches court and you are unable to control the outcome, you can ensure that the LLC presents clear evidence of its intent and purpose by practicing good governance.

Good LLC governance hinges on four key practices:

  1. Practice good recordkeeping.
    Document key business decisions.
    -Store records in a secure and fireproof location.
    -Provide members with access to records as required by the LLC’s operating agreement.
    -Keep the list of members and their ownership interests current.
    -Keep the LLC records organized. 
  2. Don’t commingle LLC and member assets.
    Keep all member and LLC assets completely separate. The initial contributions that members make to the LLC and any later contributions made after a capital call should be clearly documented as such.
    -Make sure any loans to the LLC—and the repayment terms—are clearly documented.
    -All distributions and any advancements to members should be documented as such.
    -Members who are also employees of the LLC should receive a paycheck from the LLC payroll account like any other employee would.
  3. Follow the operating agreement.
    Do what you say you’re going to do. Your LLC should have an operating agreement even if your state’s LLC statutes don’t require one.  A well-drafted operating agreement provides a written record of owner expectations in terms of LLC structure and ownership, as well as business, operations.  The agreement is an essential tool for keeping the peace among LLC owners and restoring the peace if a disagreement arises.  And, if a dispute arises between the LLC and a third party, the operating agreement may become evidence the fact finder considers to resolve the dispute.
  1. Amend the operating agreement if the LLC is acting inconsistently with it.
    -If the LLC ends up in court and the intent of the LLC or its members is at issue, the fact finder will look at three main factors to make a determination: the LLC documents (the articles of formation filed with the state, the buy-sell agreement, if any, and the operating agreement), and the actions of the LLC and its members. 
    When the actions of the members and of the LLC are in sync with the governing documents, a court is more likely to find an intent that corresponds to the original intent of the members when they formed the LLC.  But when the operating agreement says one thing and the LLC or its members behave differently, intent is wide open for interpretation.  If that happens, a court may place greater weight on the actions of the members or LLC and make findings of fact vastly different from what is found in the LLC documents, resulting in a potentially disastrous outcome.

 Practicing good governance of the LLC helps make the intent and purpose of the LLC clear to its members and to outside parties.  And, if a conflict goes to court, good governance provides the judge or jury with a clear picture of what the members intended for the LLC.

We work closely with business owners to create and implement forward-thinking business-planning strategies.  We anticipate what can go wrong and counsel our clients on how to best maintain their businesses so that they are well prepared to weather any storm.

If you are interested in learning how we can assist you and your family with business planning, please contact Legacy Law Firm, P.C. at (605) 275-5665 to schedule a free consultation today!



Impact of Tax Reform on Small Businesses

Now that it’s tax season, you may be concerned how the Tax Cuts and Jobs Act, enacted in December 2017, will impact your small business. The reforms represent the most sweeping tax overhaul in 30 years and could have a positive impact on your business’s bottom line—but they may have left you feeling a little confused. Here are some of the most important changes.

Qualified Business Income Deduction

Under the new tax law, many owners of pass-through businesses, such as sole proprietorships, partnerships, and S corporations, may deduct up to 20% of their qualified business income. This new deduction—known as the qualified business income deduction or Section 199A deduction—can be claimed by eligible taxpayers on their 2018 federal income tax returns, lowering their taxable income. One notable exception is that married owners of service-based businesses like accounting firms or doctors’ offices, can only claim the deduction if they have an annual income below $315,000 ($157,500 for single business owners). This deduction replaces the domestic production activities deduction, which allowed business owners to write off 9% of income derived from qualified domestic manufacturing and production.

Lower Corporate Tax Rate

The centerpiece of the new tax law is the reduction of the corporate tax rate from a top rate of 35% to a flat rate of 21%, a substantial cut for many businesses structured as C corporations. However, because the reforms eliminated the 15% rate on the first $50,000 of taxable income, some small C corporations could end up with a bigger tax bill. For example, a C corporation with $50,000 of taxable income that would have owed $7500 under the prior law will owe $10,500 when it files its 2018 federal tax return.

100 Percent Expensing for Qualifying Business Assets

Businesses can now write off the entire cost of most depreciable business assets in the year the business places them in service, resulting in reduced current income tax liability. This break generally applies to depreciable assets with lives of 20 years or less–items such as, machinery, computers, and furniture. This part of the tax reform law is temporary, lasting until 2022 and then phasing out over several years.

Increased Depreciation Allowances for Vehicles

Businesses that purchased new or used vehicles after September 27, 2017 and placed them into service in 2018 can claim an increased maximum allowance of $10,000 for Year 1 or $18,000 if first-year bonus depreciation is claimed.  For year two, the cap is $16,000 and for year three, $9600. For year 4 and all subsequent years until the vehicle is fully depreciated, the cap is $5760. For 2019 and beyond, the allowances will be indexed for inflation. In addition, for qualified new and used heavy SUVs, pickup trucks and vans purchased for the business, 100% of the cost can be written off, a significant improvement over the prior law.

Family Paid-Leave Credit

Under the new law, certain eligible employers who provide paid family and medical leave to their employees during the 2018 and 2019 tax years may qualify for a new business tax credit. To be eligible, employers must comply with a laundry-list of conditions, including having a written policy, providing at least two weeks of leave, and paying at least 50% of the wages normally paid to the employee. The credit is equal to 12.5% of the amount of wages paid during the employee’s time of leave. However, a larger credit is available for employers that pay over half the employee’s normal wages while they are on leave.

Some Deductions Eliminated or Reduced

Although many of the reforms result in tax savings for small businesses, some, like the elimination or reduction of certain deductions, could have a negative impact on their tax bills. Although there are many changes, here are some of the most impactful.

  • The tax write-off for business-related entertainment expenses was eliminated in the new tax law. However, business owners can continue to deduct 50% of the cost of business meals if certain conditions are met, and the cost of holiday parties can still be fully deducted.
  • Qualified transportation. Under the new tax law, a business owner generally can no longer deduct the expenses of providing tax-free transportation fringe benefits (like the cost of parking or transit passes) or expenses incurred providing employees with transportation for commuting.
  • Net Operating Losses (NOLs). The new law does not eliminate but does lower the deduction for net operating losses, which are losses taken in a period where a business’s allowable tax deductions are greater than its taxable income. NOLs can now offset only 80% of taxable income in the future, and carrybacks are generally no longer permitted. However, NOLs can be carried forward indefinitely under the new tax law, which is an improvement over the 20-year limitation under the prior law.

Estimated Taxes

The owners of pass-through entities such as sole proprietorships, partnerships, and S corporations may be required to pay estimated federal taxes each quarter unless they had no tax liability the prior year or owe less than $1000 when they file their tax return.  Because of the changes in the income tax rates,  changes to deductions, credits and exemptions, the amount of estimated taxes that should be paid is a trickier question than in previous years.

What to Do Next

The new tax reform legislation is complex and sweeping.  Make sure you are getting proper guidance about how to maximize your tax savings by visiting with your accountant.   It is important to have a tax planner, rather than just a tax preparer with tax season upon us.



7 Reasons to do Estate Planning in 2019

7. We haven’t found the Fountain of Youth…yet!
6. Accidents are called accidents for a reason.
5. Cancer and many other health issues don’t discriminate.
4. Some days you may feel like you are losing your mind, but one day you really might!
3. Men may age better, but women live longer: Ladies, let’s be prepared!
2. Every tax bracket will face the unexpected and eventually death; it’s not just for the top 1%.
1. To protect and take care of the people you love – even when you can’t.



To continue providing superior client service, we are looking to add a Social Worker to join our Legacy team at our growing elder law practice.

Why Join our Legacy Team?

Legacy Law Firm, P.C. provides a collaborative and positive environment that promotes professional and personal development.  We are highly selective and protective of our team members, so candidates must reflect high ethical standards and embrace the philosophy that there is no “I” in “Team.”  Moreover, we share an abiding belief that serving our clients is sacrosanct and a calling that we take seriously.  Have we mentioned that we think going to work should be fun?

Would You be a Good Fit? –

We are looking for someone to act as an advocate for our clients and their families while assisting them to gain access to resources and services.

The candidate must be able to demonstrate the following:

  • Licensed Social Worker
  • Has experience with Medicaid applications and working with the Department of Social Services.
  • Ability to draft and prepare relevant documents and correspondences.
  • Has demonstrated a high level of accuracy in preparing and reviewing documents.
  • Is familiar with home health care, assisted living and skilled care facilities.
  • Is able to develop a network of referral resources and serve as a community liaison.
  • Is able to attend meetings of professional organizations and perform various other marketing tasks.
  • Demonstrates professionalism and efficacy in critical thinking.

Candidates should have at least 1 year of relevant experience of service in the above areas.

Compensation will be commensurate with experience.

Contact Us!

Email your cover letter, resume, and any references to Felan Link at [email protected].  All applications will be kept confidential. We look forward to meeting you!

Are Your Trade Secrets Really Safe? 4 Steps To Safeguard Your Competitive Edge

A trade secret is a piece of information which is confidential, can be legally protected, and gives your company a competitive edge.  Lots of the most famous examples involve recipes: the formula for Coca Cola, McDonald’s Big Mac “secret sauce”, or that Mrs. Field’s chocolate chip cookie recipe that caused such a legal stir in the 90s.  But you don’t need to be a food purveyor or a mega-corporation to have a unique approach that sets you apart from your competition—and if you can legally keep it a secret, you should.



Here are four steps you can take to keep trade secrets safe:

  1. Make a list: The first step in protecting trade secrets is knowing that you have them.  Look across your business and think about any types of information you possess that are both confidential and critical to your success.  Trade secrets could be product designs, customer lists, marketing plans, sales forecasts, or processes.  For software developers, proprietary code obviously needs protection and for restaurants and food stores, it’s the secret recipe.  Conduct a “trademark audit” to identify the information you have a legal right to keep private and wouldn’t want your competitors to find out.
  2. Stake your claim: Once you know what your trade secrets are, it’s essential to start treating them like secrets.  Stamp or watermark “confidential” on sensitive documents.  Get confidentiality and non-disclosure agreements in place with employees and vendors.   These will put the people who learn your secrets on notice not to usurp them and lay the basis for a legal claim, if necessary.
  3. Lock it up:  Take whatever steps are reasonably available to you to secure your trade secrets from access.  Digital files and systems should be encrypted and password protected. Physical files should be kept locked.  Establish rules around access to sensitive files.  If possible, use a badge system to control access to your facility and posted signs to designate areas where access is controlled.
  4. Train your troops:  Many disclosures of trade secrets are inadvertent slips by an employee who simply did not know better.  That may make it easier to forgive, but the negative impacts on your business are still there.  Prevent this with good training and education for your employees on what your company considers confidential and what employees’ obligations are.  Back the training up with strong written policies.  And when an employee leaves, take steps to shut down their access to your files and systems right away to ensure that your secrets don’t leave with them.

Whether your trade secret is a treasured family recipe, a brilliant string of code, or a closely guarded customer list, it won’t be a secret for long unless you are careful.  Taking the steps above is a great first step toward a solid trade secret strategy.  For even further assurances of security, consider retaining counsel for a professional security audit.  Business attorneys like us can be great partners in protecting your trade secrets and your business.

If you are interested in learning how we can assist you, your family, and your business dreams with comprehensive business planning, please contact Legacy Law Firm, P.C. at (605) 275-5665 to schedule a free consultation today.